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Nigeria: Reps Reject Another $4bn Loan for Power Sector
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Leadership (Abuja)
30 April 2008
Posted to the web 30 April 2008
Philip Nyam
The House of Representatives Committee on Banking and Currency yesterday rejected another $4 Billion US dollars proposal by the federal government to improve power generation in the country. This is coming on the heels of the on going probe of the sector by the House.
This followed a revelation by the Revenue Mobilisation, Allocation and Fiscal Commission that the newly constituted federal government committee on power constituted by president Umaru Musa Yar'adua want to obtain a credit facility of 4 Billion US dollars from the African Finance Corporation (AFC) to among other projects generate additional 6000 mega watts of electricity.
The proposed loan was also intended to be used in funding some of the National Integrated Power Project (NIPP) projects which contracts were awarded by the president Olusegun Obasanjo administration and new ones proposed by the new committee.
Chairman of the House Committee on Banking and Currency, Chief Ogbuefi Ozomgbachi at a meeting with officials of the commission opposed the federal government proposal for such loan saying that it has over 7 Billion credit accruing from the excess crude between January and March this year which it can access.
The chairman argued that at this point in time, the country should look inward in funding serious projects like power generation and therefore it was unwise for the parliament to approve of such external borrowing.
Speaking to journalists shortly after presenting a ''New Concept Of Crude Oil Benchmarking 'to the Committee, which is designed to allow for the fixing of crude oil benchmark tied minimum cost of governance and specific priority projects, the Chairman of the Revenue Mobilization, Allocation and Fiscal Commission, Alhaji Hamman Tukur urged the federal government to look inwards instead of going for loans.
''You have 7 Billion US dollars to your credit in the excess crude account and you want to obtain an external loan? It does not make sense, take something from what you have'', he advised.
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He however explained that they were not accusing government of any wrong doing but only advising it to ensure that things get better for Nigerians adding that oil prices will not drop and that they were expecting it to rise as high as 150 US dollars at the end of the day.
This move by the House of Reps seems the sensible approach to follow. The new administration, seemingly bent on undoing the the economic progress created by the last administration of Obasanjo in his efforts to completely erradicate the country's debts to ease the financial burden of the country, seems to start piling up debts for the country now even though, as pointed out by the House of Reps., such a step by the present administration is absolutely unnecessary because there is an alternative. WHAT IS NEXT?!
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